LONDON, (17 September 2018) - Aon, the leading global professional services firm providing a broad range of risk, retirement and health solutions, has advised one of Greene King’s pension schemes, the Spirit (Legacy) Pension Scheme on its first bulk annuity purchase - an important step in pension de-risking.
The Spirit (Legacy) Pension Scheme is one of the leading pub retailer and brewer’s, two final salary schemes. It has secured a £50m bulk annuity with Scottish Widows to cover some of the scheme's pensioners, with the intention of securing further annuities in the future when supported by the scheme's asset strategy and available market pricing. This annuity improved the return on scheme assets while reducing risk.
The approach of de-risking in tranches is a growing market trend. As a result, repeat buyers have represented over half of the bulk annuity market in recent years.
This transaction was run by Aon using its streamlined process on the market-leading Compass platform, which is designed to maximise insurer participation and enable a quick transaction from a winning bid. The success of this approach was demonstrated in the active involvement of Scottish Widows and other bidders who normally prioritise larger transactions.
This transaction included a very clearly defined annuity structure and pre-negotiated contracts provided through Eversheds Sutherland. Aon also provided due diligence advice integrated into the broking process to allow a quick decision.
Iain Urquhart, chairman of the trustees of the Spirit (Legacy) Pension Scheme, said:
"The scheme has progressed well on its journey to providing full and permanent benefit security, and reaching this important landmark as part of the wider plan represents good progress."
Richard Smothers, Chief Financial Officer at Greene King, added:
"I am pleased to take this important step in reducing the risk from our pension arrangements on attractive terms and to the benefit of our scheme members."
Dominic Grimley, Risk Settlement adviser at Aon, said:
"Careful positioning using Aon’s Compass platform was a key element in obtaining strong pricing in a busy market and an efficient transaction. The trustees and company reacted quickly to capture a market opportunity, and the Scottish Widows team showed great commitment.”
Emma Watkins, Director of Individual and Bulk Annuities at Scottish Widows, said:
"We are proud that the trustees have chosen to insure members' benefits with us as part of their ongoing de-risking plan. The preparatory work they had done with their advisers and the streamlined auction process allowed the transaction to be implemented smoothly."
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Notes to Editors
Aon plc (NYSE:AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance.
Aon announced in May 2018 it will retire the business unit brands of Aon Benfield and Aon Risk Solutions, which follows the retirement of the Aon Hewitt business unit brand in 2017. This move was designed to increase the rate of innovation across the firm and make it easier for colleagues to work together to bring the best of Aon to clients. Aon has five specific global solution lines: Commercial Risk Solutions, Reinsurance Solutions, Retirement Solutions, Health Solutions and Data & Analytic Services.
About Scottish Widows
Scottish Widows has completed 17 bulk annuity arrangements to date securing the benefits of over 25,000 pension scheme members. Scottish Widows was founded in 1815 as Scotland’s first mutual life office and is one of the most recognised brands in the life, pensions and investment industry in the UK.
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